Hospitality Strategy: Macro, Micro, and Strategic Planning Report

This report provides a comprehensive strategic analysis of Meliá Hotel International within the hospitality industry. It begins with an examination of the macro environment using PESTLE analysis, identifying political, economic, social, technological, environmental, and legal factors impacting the hotel's global operations. The report then delves into the internal environment, employing SWOT and VRIO analyses to assess the hotel's strengths, weaknesses, opportunities, threats, and its valuable, rare, inimitable, and organized resources. Furthermore, the report applies Porter's Five Forces model to evaluate the competitive landscape and identify sources of competitive advantage. Finally, it explores strategic planning using the ANSOFF matrix to guide decision-making and maximize competitive advantage within the dynamic hospitality sector. The analysis considers factors such as global operations, communication challenges, technological advancements, and the impact of external events like terrorism and the COVID-19 pandemic.

Hospitality Business
Strategy

Table of Contents
INTRODUCTION......................................................................................................................3
MAIN BODY ............................................................................................................................3
Part A..........................................................................................................................................3
Applying appropriate frameworks, analyse the impact and influence of the macro
environment on a given hospitality organisation and its strategies........................................3
Identification of internal environment and capacities of organisation by the use of SWOT
and VRIO analysis..................................................................................................................5
Application of porter's five forces model to identify the competitive advantage within
market ....................................................................................................................................8
Part B..........................................................................................................................................9
Using ANSOFF matrix for proper strategic planning within hospitality industry.................9
CONCLUSION .......................................................................................................................11
REFERENCES ........................................................................................................................12
Books and journals ..............................................................................................................12

INTRODUCTION
Tourism Industry is developing continuously that become an important part of
hospitality organisations and industry. Because it provides different opportunities to
hospitality industry where they can use these customers for increasing their revenues as well
as operate at global level. Hospitality firm can be defined as that place where an individual
can stay by paying a rental amount for some period of time when he visits a place different
from its origin (Lipitakis and Phillips, 2016). In this report, The Chosen organisation will be
Meliá Hotel International. It is a Spanish Hotel chain which was founded by Gabriel Escarrer
Juliá in 1956. Hotel is operating with current account of 374 hotels in 40 countries and on
four continents. In the beginning of this report there will be description about the Macro
environment of the organisation by the use of pestle analysis and formation of a proper
strategy. There will also discussion about the internal environment by using the spot
framework and VRIO framework. In the middle of the report there is discussion about the
porters five Force model and the competitive forces which can be used by the organisation.
The end of the report is consisting of using a proper theory for strategic formation where
organisation can get maximum competitive advantage (Hua, 2016)
MAIN BODY
Part A
Applying appropriate frameworks, analyse the impact and influence of the macro
environment on a given hospitality organisation and its strategies
MELIÁ HOTEL INTERNATIONA is a huge Hotel chain within Global world which
makes it a different and important factor within the hospitality industry. There are various
kinds of external factors which have their great impact on hospitality. This hotel is also
trading within this industry it is important for the hotel to analyse its external environment
and reduce their negative impact on the performance of different business activities (eritelli
and Schegg, 2016). In context of MELIÁ HOTEL INTERNATIONA, it can use pestle
analysis which will help in identification of political social economical technical
environmental and legal factors which have direct impact on business activities for and
hospitality industry.
Pestle analysis of MELIÁ HOTEL INTERNATIONA

This analysis is that Framework which is used by this organisation to clearly identify
its external environment and make decisions related to that environment for getting maximum
advantage within competitive market.
Political: political factors are those which are related to rules and regulation formed
by the government of the nation where the organisation is currently working and performing
its different activities. In context of MELIÁ HOTEL INTERNATIONAL, it is performing its
operation at a global level. Current time terrorism is a major political issue within whole
globe where it has negative impacts on the business of Hotel (Bharwani and Mathews, 2016).
Because of terrorism various tourism destinations are getting destroyed as well as tourist have
also fear of unwanted attack by terrorist. This Acting negatively on the hotel as they have to
make more security arrangement which also in cost as well as interest of tourist is also losing
because of fear from terrorist.
Economic factors: economic factors include those factors which are related to
economy where the business is going to start its business are currently operating. this hotel is
operating its business at global level so it has to consider all the factors within the economy
of different nations. it have both positive and negative impact on the business because in
some Areas where there are developing economy the growth rate of these economy is are
higher which help business in growing as well as expanding their market. Impact of this
economic factor on this hotel is that, there is some developed economy like USA, Russia
where the economic growth is very low and it is impossible for business to operate because of
regular loss and decline in revenue (Bowie, Buttle, Brookes and Mariussen, 2016).
Social factor: include those factors directly associated with social thinking mentality
culture behaviour of individuals within the society and area where the organisation is
operating. In Current situation MELIÁ HOTEL INTERNATIONAL, it is operating at global
level and has to deal with all the social factors related to different economy. In the current
business environment there are continuous changes within the tourism and travel industry
where the current trend is focuses on increased tourism and travel activities. This is in favour
of hotel where it can increase its revenue as well as improve its infrastructure to attract large
number of customers and use social factor as a competitive advantage (Chan and Hsu, 2016).
Technological factor: it includes those factors which are related to technological
changes within the area and innovation within the area where the organisation is working
currently. In context of MELIÁ HOTEL INTERNATIONAL, petrol operating in the

environment where are there is continuous changes in technology which is used by different
hospitality organisation. This also impacting positively on the organisation as it is now using
the online booking system as well as self-checkout in check in system which facilitate easy
and convenience to customers as well as increased their satisfaction where they can now use
online booking for preserving their rooms. Impact positively in the revenue of the
organisation as it can now expand its business to further areas where it can use online
booking system to reserve the rooms of different customers from different area of the world.
Environmental factors: include factors like climate change pollution geographical
location and many more things. It is most important part of any hospitality organisation this is
because geographical location helps the organisation in making their separate image within
the market. In context of MELIÁ HOTEL INTERNATIONAL, it is operating at impressive
geographical locations where it can easily attract customers because of wide availability of
tourism and travel destination regarding these areas. Organisation always chooses a proper
climate as well as environment around the business where it can easily attract the customer
by the natural beauty (Jones, Hillier and Comfort, 2016).
Legal factors: it include the factors which are related to rules regulations and policy
formed by the different governments in legal authorities of the Nations organisation is
working.in context of hotel there are various rules and regulations which have to be this will
help organisation in reducing its legal this will help organisation in reducing its legal liability
as well as increasing the brand image within the environment where it is currently. This will
also help business in formulating different policies where it can save the interest of consumer
as well as itself (Katou, 2016).
After critically evaluation of pestle analysis for this hotel it can be seen that there are
various factors which have both positive and negative impact on the business it must be
consider all the factors in an effective way for achieving the business objectives and making
decisions regarding different policies and procedures.
Identification of internal environment and capacities of organisation by the use of SWOT and
VRIO analysis
For succeeding in the business operation and getting the maximum competitive
advantage by formulating different decision making policies and strategies it is important for
hospitality organisation to identify its internal strength and micro environment. For this

scanning it can use SWOT and VRIO analysis which will help organisation in identifying its
internal capabilities and making decisions according to this.
SWOT analysis of MELIÁ HOTEL INTERNATIONAL
SWOT analysis can be defined as and Framework which is used by this hotel to
identify its internal environment. It includes strength, weakness, opportunities and threats of
the organisation which will help in working and gaining maximum advantage.
STRENGTH WEAKNESS
Global operation: The major strength of this
hotel is that it is operating at global level; this
will help MELIÁ HOTEL INTERNATIONAL
in managing its revenue as well as losses by
adjusting them to each branch of hotel. It will
also help in increasing its revenue has larger
organisation get the benefit of economy of scale
(Kim, Lee and Fairhurst, 2017).
Continuous improvement: It is also one of
strength of this hotel as it operates at global
level where it always uses innovative methods
and improvement within the functioning of the
organisation. Will help it in decreasing the
negative impact and increasing positive
outcomes of every operation within the
management and functioning of organisation.
Communication problem: Hotel is
operating at global level but it is important
for it to maintain a proper communication.
This communication is lacking in this
hotel because they have loose supply chain
management which impact negatively on
the communication between different
hotels of different areas.
Declining revenue: revenue of the hotel is
also continuously decreasing because of
increased competition as well as there are
various other branches which are not
performing inadequate min and that
impact negatively on the overall revenue
of the hotel.
OPPORTUNITIES THREATS
Train staff: Major opportunity in front of hotel
that it can train its staff where they can perform
different activities as well as complex task
within the organisation when there is need of
that.it will also improve the productivity as well
as impact on profit of the organisation in
positive manner.
Joint ventures and tie up: Hotel is suffering
Increased competition: There is
continuous improvement within the hotel
industry because of increasing market and
profitability of different forms which
impacting as a thread for the organisation
within the market (Kuo, Chen and Tseng,
2017).
Covid-19: It is a pandemic disease which

from low supply chain management where it
can be used different types and joint ventures
with some other branches or small suppliers for
increasing its value and building a proper
supply chain management.
also causing negative impact on the
performance of different hospitality
industry because of restrictions from the
government. Covid-19 damaged world
economy where hospitality industry has
huge impact of this because of closure in
operations at complete level.
VRIO analysis of MELIÁ HOTEL INTERNATIONAL
Valuable: valuable can be defined as those resources which are important part of the
organisation and help organisation in making them unique where it can work for
specialisation in these resources. In context of hotel, there are four valuable resources which
are investor, employees, supply chain and technology (Li and Singal, 2019).
Rareness: it includes those resources which are there as well as valuable for the
organisation. Organisation must keep these resources and use them in an effective manner. In
context of MELIÁ HOTEL INTERNATIONAL, the rarest resources are investor’s
employees and technology of the organisation this is because they are not easily available
within the market for the competitors to grab them (Martínez-Pérez, García-Villaverde and
Elche, 2016).
Imitable: All resources of organisation that are valuable and rare for an organisation
and cannot be copied by the competitors of organisation are imitable resources. When taking
MELIÁ HOTEL INTERNATIONAL into context all the human resources of organisation
along with technological development that are brought in by organisation accounts to its
imitable resources. They provide training programmes for their employees and invest huge
amount in their research and development to generate such resources.
Organised: Employees are the well organised part of the hotel this is because
company always believes in effective staff and their management where it can increase its
worthiness and productivity within the competitive market. This will provide a competitive
advantage to the organisation within the hospitality industry (Petronella , Swart and Anne
Taylor, 2018).

It can be identified from the above mentioned VRIO analysis and SWOT analysis that
there are various factors which impact the organisation. This also improves the global
strategy of the organisation as well as performs its function in an effective manner.
Application of porter's five forces model to identify the competitive advantage within market
Porter’s five force model
Porter’s five force model is that analysis which can be used by the organisation to get the
maximum advantage within the market by following its different these factors are mentioned
below:
Power of supplier: the MELIÁ HOTEL INTERNATIONAL is operating in
hospitality industry where suppliers are available in large number so this factor is moderate
for the organisation because there are various kinds of suppliers which can be used by the
organisation (Prud’homme and Raymond, 2016). This increase the power of organisation as it
can now bargain from its suppliers and gain maximum competitive advantage by serving its
consumer with less cost.
Threat of new entrants: Requirement of investments to enter into hospitality sector
is very high. This requirement occurs due to new development of infrastructure. Tjhis makes
it difficult for organisations to enter in market. Therefore the threats from new entrants in
market for MELIÁ HOTEL INTERNATIONAL is very low.(Rather and Sharma,
J.Y.O.T.I., 2016)
Power of customer: power of customer is also moderate factor for the organisation
this is because there are a large number of customers within the tourism and travel. The
customers are increasing day by day because of increasing trend toward tourism and travel.
This can become a competitive advantage for hospitality industry as the can now improve
their services and attract more and more customer towards the organisation where the
bargaining power of customer is also low because of high availability of customer within a
specific (Scott, 2016). This is moderate for the MELIÁ HOTEL INTERNATIONAL because
there are a large number of organisation which are trading within the industry which also
increase a little bill amount of bargaining power to customer.
Competitive rivalry: Competitive rivalry in hospitality industry is very high. There
are a number of hotels who are looking for attaining market shares through the help of new
products and services MELIÁ HOTEL INTERNATIONAL. Services provided by all these

sectors do not differentiate much due to which customers look for value. It is required by
businesses to work on their services in order to retain customers and not lose their loyal
customers to any of their competitors. Hyatt hotels, four seasons hotels, jetwing hotels are
some of its competitors.
Threats of substitute product: Threat from substitutes in hospitality sector is low. In
MELIÁ HOTEL INTERNATIONAL, it does not face much threat from substitutes as the
value and services provided by every hotel differs. However at times of recession people may
opt for cheap motels or hostels that can lead to losses for hotels.
Part B
Using ANSOFF matrix for proper strategic planning within hospitality industry
Strategic planning can be defined as in set of activity which is used by the organisation
to get its objectives and goals in a specific time where it can use its resources in an
appropriate way by reducing the cost. MELIÁ HOTEL INTERNATIONAL hotel is also
operating at global level so it is important for this to use a proper strategic planning with in its
functioning for this it use ANSOFF matrix where it divide it's market according to it. There
are four type of strategy which can be adopted by the organisation for getting the maximum
advantage.
ANSOFF matrix:
It is a Framework which is used by the organisation to formulate a proper strategy and
use it in a target market where it can increase the sale of the products and services has won as
increase its market share for generating profit and retaining itself for a longer period of time.
It includes four types of strategies which are discussed below.
Market penetration: It includes the strategy where organisation has to increase and
improve its existing product within the existing market where it is trading. In the context of
MELIÁ HOTEL INTERNATIONAL hotel, it is operating in a global market where it is
continuously improving its products and services in existing markets for increasing the
business and satisfaction of customer.it can also use different type of business advertisements
which will help in promotion of these services and attractive number of customer to word the
existing infrastructure (Sowanber, Ramkissoon and Mavondo, 2018).

Market development: Market penetration is directly related to improvement of
existing product in new market. Here organisation can launch its existing product within the
new market. MELIÁ HOTEL INTERNATIONAL hotel is operating within different market
and it is easier for organisation to operate in new market with existing products because of
good investors as well as trained staff. There are various kinds of methods which can be used
in market development like identification of market analysis of market situation and
improving the condition for launching a new product.
Product development: This is directly related to developing a new product within the
existing market. This is also risk strategy because development of new product involves
various kinds of cost as well as capital. In context of MELIÁ HOTEL INTERNATIONAL
hotel, in order to achieve this strategy organisation have to develop new and innovative
services within its existing infrastructure. It can use facilities like bar, restaurant, and other
club membership facilities which will help organisation in developing a new service within
its existing market (Varelas and Georgopoulos, 2017)
.Diversification: Diversification is related to launching a new product within a new
market. This is the most risky strategy for the MELIÁ HOTEL INTERNATIONAL. It is a
risky strategy as huge investments are requires studying new market and developing products
and services to launch in those markets. A small mistake can easily feel the whole program
of the MELIÁ HOTEL INTERNATIONAL and also make it difficult for the organisation to
recover because of huge capital investment and failure in operation.so this strategy should not
be adopted by the organisation until and unless it is sure about the market as well as its new
product which it is going to launch in the new market (Vlachos, 2016).
From the above it can be identified that MELIÁ HOTEL INTERNATIONAL hotel is
operating at a good profit where it can use the strategy of expansion and growth so here
market development strategies are useful for this organisation because they are operating at
good profit and it is easier for organisation to survive within the dynamic environment while
launching existing products and services in new markets. Also help hotel in increasing its
revenue.
Porter generic strategy
Porter generic strategies can be defined as a strategy which is adopted by the organisation to
achieve the competitive edge within the market. It involves two kinds of focuses which can

be derived by the organisation which include differentiation and lower cost. Organisation can
follow the strategy to achieve the competitive edge by lowering the cost for differentiation
itself from the competitors.
Cost leadership strategy: It is effective strategy which can be adopted by the
organisation where it involves meaning the market share by reducing the cost of the product
and selling at low cost. In relation to MILIA HOTEL INTERNATIONAL, it can also use
cost leadership within the organisation performing at economy of scale and experiencing
curve effectiveness. For this organisation can use approach to asset utilisation. By utilising
the asset in an appropriate manner for example a restaurant within the organisation can
turntable around very quickly so that it can manage the customer experience as well as
improve the level of customer satisfaction and fast services. This will reduce the cost of the
organisation for the second period of the table and also help in increasing cost effectiveness.
Differentiation strategy: It is important that the under this model which health
organisation in creating a differentiation with the products and services so that it can improve
its functioning in comparison of its competitor and achieve a competitive advantage. Melina
hotel international can usually adopt the differentiation strategy because in the target market
of organisation there is no price sensitive customers as well as the market is comparative and
saturated where customer has needs guarding their satisfaction.
CONCLUSION
It can be concluded from the above mentioned report that there are various
opportunities to the hospitality industry in market. Grabbing the opportunity and making the
organisation favourable in any situation it is important for MELIÁ HOTEL
INTERNATIONAL clearly identify its macro and micro environment with the use of
appropriate framework. It is also identified that porter's five force model can be used to
identify different factors which have their impact on performance of the organisation and will
help in identification of competitive advantage like power of supplier power of customer. It is
also identify that organisation can use a proper business strategy in strategic planning by the
use of ANSOFF matrix where it can develop its market and increase revenue with the help of
it.

REFERENCES
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